Abstract:
Despite the favorable climate in the banking sector of Ghana over the last decade, it can still
be said of some to be poorly performing in relation to overall level of industry performance
and wealth maximization. With the expected fluctuations in performance levels, ability to
determine the competition nature and the resulting profitability of an industry is vital to the
development of effective strategy in any industry. It is on this premise this study is designed
to evaluate the Porter’s Five Forces model impact on banks performance using Eco-Bank
Ghana, Barclays Bank Ghana and Fidelity Bank as the case study. The study was
explanatory in nature. Primary data was collected through questionnaires from a sample
size of 84 management staff. Responses received were analyzed using T-Test and Linear
Regression analysis. Empirical findings suggested that, the Five Forces had contributed to
the performance of banks in Ghana by impacting on competition and profitability of the
industry as a whole. Even though all the five Forces had impacted on company’s
performance, the bargaining power of supply had the most impact on the industry
performance. It was therefore recommended that, Companies in the banking industry in Ghana must invest in finding new ways to energy supply rather than relying solely on ECG
as major supplier and also invest in new product development since competition in the
industry was on product/service innovation.
